The big blogosphere news today came from this WSJ article: "McDonalds may drop health plan." And although the fast food company backed away from the story almost as soon as it broke, the lefty blogs couldn't give in to the latest evidence that Obama's claim that "if you like your insurance, you can keep it" was a big lie.

So then the rationale became: it's OK anyhow that McDonalds is dropping coverage because, well, it was a crummy plan anyway. (See here, here, here, and a bunch more at Memeorandum.)

Extra – Case in point from TNR criticizing the $10,000 plan: "To call that "insurance" is to distort the definition, since these policies would do very little to help people with even moderately serious medical conditions."

Really? I'm in my early forties and I guarantee I haven't used ten-grand in health insurance over the past ten years. McDonalds "mini-med" plan isn't designed for middle-age guys with heart conditions; it's designed for teenagers with acne. But then, once again, the intractable Obamacare cheerleaders like Ezra Klein can't see the logic in allowing younger Americans make their own health care choices. The Commerce Clause will hammer all nails down.

Strictly boilerplate - Reliable Boston Globe liberal Derrick Jackson calls the effort to roll back the Massachusetts sales tax "A cut we can't afford." Funny how we were able to get by just fine with the lower rate for years, but pay that no nevermind. Instead Jackson rolls out the standard imagery of firefighters forced to use water pistols used to justify every expansion of government. Keep on thinking it's all "tea party craziness" buddy - it's a handy rationalization.

Monday, September 27, 2010

What a great crowd! - It's become a running joke among we rednecks that television coverage at NASCAR races tends to focus on the packed grandstand while glossing over the near-empty bleachers. Attendance at races is down because, well, let's say the "economy" because NASCAR won't entertain the idea that the races have become boring. (Jimmie Johnson may win his fifth consecutive championship this year - what fun.)

Right back at'cha Beacon Hill - This past year, Massachusetts hiked the sales tax from 5% to 6.25% and now a thin plurality of Bay State voters are ready to scale it back to 3%. "Taxed enough already" Massachusetts?

The new health care math - Any blog post that includes a Tom Lehrer video gets a link. Villainous Company: "Don't worry: as with the new math, technical accuracy is less important than promoting understanding of just how much better off we are under this new system." Deploy the anecdotes!

Addressing an activist pushing for more funding for global AIDS initiatives, the president said, "We heard your point. And as I said before, we increased AIDS funding. … The people who will take over if we don’t focus on the election, I promise you, will cut AIDS funding."

Of course I don't need to point out that federal funding for AIDS treatment and research has risen steadily – often by double digits – over the past twenty years, in both Democratic and Republican administrations. But, what the heck, it's all part and parcel of Obama's traveling road show where the promise of another "car in the ditch" speech couldn't fill a ballroom in New York City with $100 tickets and an open bar.

In an apt follow-up to this post, the Chicago Tribune worries about "Entitlement Nation – More are living of tax revenues, and fewer are providing them":

One problem is that as more people get benefits and fewer pay for them, the democratic pressures to contain federal spending weaken. The Journal notes that payments to individuals of one kind or another now account for 64 percent of all outlays, up from 47 percent in 1990. And people who don't pay income taxes may be more inclined to raise them on people who do.Robert Reischauer, head of the liberal Urban Institute, says he is not worried: "If there became an expectation that government was going to provide over half the population's well-being to a significant degree without requiring anything of the recipients, there would be reason for concern. I don't think that's where we're headed."Actually, that is exactly where we are headed. It's up to Congress and the president to change direction before it is too late.

Alexis de Tocqueville had it right: "A democratic government is the only one in which those who vote for a tax can escape the obligation to pay it."

Tuesday, September 21, 2010

The dangers of alliteration - Senator Ben Nelson is disgruntled that the "Cornhusker Kickback" was misrepresented by the GOP. Or rather: "misrepresented." It's enough to give you shell shock and road rage.

A government big enough to give you anything is big enough to take it away

Or we can employ the John Podesta counter-axiom of "Hey, now that we've expanded the government beyond imagination, we can't just take it away!"

This is the logic of promising your kid a trip to Disney World, then losing your job, but going ahead with the trip anyway. Because you promised and your credit card hasn't been cancelled yet.

Here's something to remember: for 50 years, tax revenues have stayed relatively stable around 18% of GDP. Over the same period, spending has been a little more than 20% of GDP but in 2010 federal spending will amount to over 24% of GDP with nowhere to go but up.

But, hey, maybe General Motors' stock will spike and we can dump it for a big profit.

Friday, September 17, 2010

For conservatives on the ground, it has often felt as if Democrats (and moderate Republicans) were always saying, "We should spend a trillion dollars," and the Republican Party would respond, "No, too costly. How about $700 billion?" Conservatives on the ground are thinking, "How about nothing? How about we don't spend more money but finally start cutting."

Testify, sistah!

The second thing is the clock. Here is a great virtue of the Tea Party: They know what time it is. It's getting late. If we don't get the size and cost of government in line now, we won't be able to. We're teetering on the brink of some vast, dark new world - states and cities on the brink of bankruptcy, the federal government too. The issue isn't "big spending" anymore. It's ruinous spending that they fear will end America as we know it, as they promised it to their children.So there's a sense that dramatic action is needed, and a sense of profound urgency. Add drama to urgency and you get the victory of a Tea Party-backed candidate.

Anybody who has read this blog knows I'm mortified by the unprecedented accumulation of debt on the personal, municipal, state, and federal level. Michael Kinsley (no conservative, he) hit upon our national disconnect in the Atlantic:

Debt is everywhere you look. Here’s a short inside piece in The New York Times Magazine about state and local unfunded pension obligations for retired employees. They add up to between $1 trillion and $3 trillion. Until that article, I had given no thought whatsoever to shortfalls in state employee pension funds. You? Now we can only say, "Add it to the pile." Then there is all that consumer debt - those underwater mortgages, those credit cards. And you can pick almost any number you wish, for what Medicare and Social Security will cost above and beyond their alleged "trust funds."

Where are we heading? What is the trajectory of the country? With respect, it's almost silly that we're having these debates on whether to extend the Bush tax cuts. We need to raise taxes and cut spending even more (in my opinion, much much more.) This country is on the path to a federal deficit equal to 100% of GDP – a level not seen since World War II – just to pay for the general budget and entitlements. The critical difference is that we voluntarily owed that money to ourselves in World War II through the sale of war bonds. A big chunk of the debt we'll owe in the 21st century will be to foreign countries who have stocked up on T-bills and don't exactly have our best interests in mind.

In other words, when the government had debt problems, at least it owed the debt to Americans. It was our problem. This brave new world puts this country in a box because our addiction to debt can only be fed by the very countries who wish to supplant us as a world power.

Just like the whirling dervish - The government makes the appearance of motion without making any progress. Christian Science Monitor: "Small business bill won't actually help small businesses." The subtitle says it all: "A proposed bill will make more money available for loans to small businesses. But they don't need more debt, they need more customers - and the government can't provide those."

Wednesday, September 15, 2010

Prediction: Joe Biden is going to be busy - Breaking ties in the new Senate, that is. Rasmussen predicts 48 seats for the Democrats and 45 for the Republicans, while seven seats - all currently held by Dems - are toss-ups. Real Clear Politics has six toss-ups, putting West Virginia in the "Leans Dem" column.

Efforts to tame America's ballooning budget deficit could soon confront a daunting reality: Nearly half of all Americans live in a household in which someone receives government benefits, more than at any time in history.

At the same time, the fraction of American households not paying federal income taxes has also grown—to an estimated 45% in 2010, from 39% five years ago, according to the Tax Policy Center, a nonpartisan research organization.

Tuesday, September 14, 2010

Not even close - Wow, I don't know if Christine O'Donnell's primary win over Delaware institution Mike Castle is a sign of Tea Party strength or just an overall backlash against incumbents/people who have been in Washington too long. She didn't just eke by Castle, she trounced him. And she's probably going to get beat in the general election, completing the circle of life.

Well, the Delaware GOP had to pick between a RINO they disliked but could win, and a Tea Party candidate who they liked but will probably lose. They made their choice, I suppose.

Quixotic - I confess that I don't understand President Obama's new strategy of elevating House minority leader John Boehner as a bete noire. First of all, most Americans don't know who this new enemy is. Second, for those who do know the man, it inevitably leads to headlines like this: "Pelosi took in twice as much lobbyist cash as Boehner."

Sunday, September 12, 2010

International aid causes more harm than good

That's the allegation by journalist Linda Polman who has written a new book called "The Crisis Caravan" which Polman previews in this Boston Globe story in today's paper. According to Polman, who spent several years reporting from Sierra Leone, the preconception that international aid is stolen by corrupt officials is more the rule than the exception. Here's the final question in the interview:

IDEAS: What is the worst example of abuse of aid that you saw?POLMAN: In Sierra Leone, I realized that the rebel soldiers who had been hacking off people’s hands and feet, they actually could explain to me how to manipulate the aid system....They explained to me that for 10 years, all those years they were fighting and the West didn’t want to hear about their war. It was only after they started to amputate people, more people and more people, that the international community was taking notice of their war. Those simple rebel soldiers in Africa could explain to me how that aid system works. That alarmed me.A Security Council report this year concluded that up to half of the World Food program money - $485 million per year - for Somalia is diverted from the people who actually need it, to a web of corrupt contractors, Islamic militants, and local UN staff members who are also involved in this scheme. We can shrug our shoulders about $245 million a year, but in Somalia, this is a lot of money and it is fueling conflict, and it is fueling the wrong people.

The question of whether foreign aid is more of a detriment was covered by Dambisa Moyo in this Opinion Journal piece and more extensively in her book "Dead Aid."

You know normally I would figure it a remote possibility that MA-1 Representative John Olver would lose his House seat even though every election year becomes an experiment in how little he can do to get re-elected. But driving around Western Massachusetts, I've seen dozens and dozens of signs for Republican challenger Bill Gunn and exactly zero signs for John Olver. Dare I hope? This election season, I dare.

Tuesday, September 07, 2010

It's the uncertainty, stupid - WSJ: "How trillions in stimulus produced a 1.6% recovery." In fairness to President Obama, the U.S. economy is the largest ship in the worldwide fleet and it doesn't turn on a dime. But it doesn't help when your captain issues so many conflicting and countermanding orders that you don't know which way you're heading.

Late in the evening - I know it's a little late to post this (hey, I work) but every morning I check Jennifer Rubin's "Flotsam and Jetsam" news roundup on Contentions. This morning's review had a very clever Paul Simon-theme.

It's looking like the Administration is poised to dump General Motors right before the midterm election. Reason: "Obama Motors' ill-timed IPO"

The General Motors IPO, the second largest ever, is arguably this decade's most hyped financial event. But it might also turn out to be this decade's biggest financial fiasco. Its timing is driven not by the financial needs of the company - or the interests of taxpayers who are poised to get royally screwed - but the election-year needs of the Obama administration.

The White House is desperate to get this white elephant off the books before November. Although General Motors' bottom line has improved, it's extremely unlikely the American taxpayers will see a return on "investment":

All of this means that potential investors are likely to take a dim view of the company's prospects right now, making it nearly impossible for taxpayers who still have somewhere between $40 billion to $60 billion "invested" in it to come out whole. For that to happen, the Treasury's 304 million of the company's 500 million common shares would need to average $131 to $197 per share, notes Brad Coulter director at O'Keefe & Associates, a Michigan-based corporate finance firm. That would put GM's implied valuation at somewhere between $65 billion to $98 billion.

To understand just how absurdly high this is consider that Ford Motor Company has a market value of only $40 billion. "There is no rational reason for investors to choose GM relative to Ford right now," notes Francis Gaskin of IPODesk.com. But even if investors valued both companies the same that would still represent a 50% loss for taxpayers. It was always unlikely that taxpayers would ever recover their entire investment, but a more auspiciously timed IPO might at least have limited their losses.

It's all about doing something, anything, before the vote:

Even if the IPO turns out to be less of a disaster, the Obama administration's wanton disregard for both taxpayers and the company shows just how desperate it is getting to deliver some sliver of economic good news to angry voters ahead of the November elections. But its actions only bespeak the dangers of government bailouts. GM has a long way to go before it is truly back on its feet. It might make it-eventually-just as Iraq seems to have stabilized seven years after President Bush first declared victory. But as in Iraq, it will remain an open question as to whether the bailout was worth the risk and cost to taxpayers.

It might have been worth the risk if the White House had allowed an actual bankruptcy to take place instead of the fake one that screwed the GM bondholders while maintained the contracts for all the UAW employees. The moral hazard of this whole Government Motors affair is now laid bare since we can expect GM to come back for help once they collapse...again.

Monday, September 06, 2010

One thousand simulations - A trio of political scientists predict a 50-seat pickup for the GOP in the House after running their model many, many times. Those darn voters are throwing a temper tantrum alright.

I honestly don't know what he means here, but maybe it has something to do with the mess on the carpet.

Extra - Man, you gotta feel sorry for those poor Secret Service guys on the President's detail. How many times have they had to endure the "Do you want to give the Republicans the keys to the car" call-and-response? Dozens? Hundreds? Yeah, yeah, the car's in the ditch. But I paid $800 billion for a tow truck to get it out and there it sits.

Bad faith - TPM: "House Democrats to Obama: No cuts to Social Security." This is a preemptive move against the National Commission on Fiscal Responsibility which is reportedly trying to find a compromise of tax hikes and benefit cuts to narrow America's structural deficit. It's looking like election year fears are taking over.

Thursday, September 02, 2010

You're cut off – Reason Online poses this question in "Debt Wish": "In other words, despite some anxiety, investors don’t seem too worried about U.S. debt today. But at the point when investors become more worried, might it be too late?" A corollary question is "When credit is cut off, will we have the power to pay off the debt?" It's a question that Greece is – painfully – trying to answer right now.

It's two months to Election Day and here come the predictions. Sean Trende of Real Clear Politics has an analysis titled "Bigger than 1994" with the 52-seat swing set as the floor for this midterm.

Larry Sabato and his crystal ball see a +47 for the GOP in the House, +8 in the Senate and +8 among the governor races. The Republicans need a 39-seat swing in the House to gain control and +10 in the Senate. Interesting trivia: since WWII, everytime the House has flipped, so has the Senate.

Wednesday, September 01, 2010

You owe $355,415

I just finished watching the movie "I.O.U.S.A." about America's addiction to debt, both privately and as a public policy to fund our overspending. It was a very balanced documentary mostly featuring former Comptroller General David Walker and it took shots at all political parties for what was called a "deficit of leadership" to match our actual deficits.

The main thing I took away from the film is that it reinforced my special obsession with the U.S. debt: the structural gap between entitlement promises and our ability to pay for them. Social Security has an unfunded liability of $14.5 trillion, the Prescription Drug Plan has a liability of $19.2 trillion, and the granddaddy Medicare has an unfunded liability of $76.4 trillion. In other words, we need over $110 trillion right now (or $355,415 per American) to pay for all this stuff and we currently have zip. Meanwhile, foreign countries are gobbling up U.S. T-bills, raising the specter of economic warfare in much the same way the United States pressured England and France during the Suez Canal crisis.

Anyway, it was a very good, eye-opening, and scary movie. But they weren't above a little humor: in the closing credits, they played Nick Lowe's "Cruel to be Kind" as a reminder that a little pain right now will help America avoid a calamitous fiscal reckoning in the future.

Discovery Channel gunman taken down - When I left work today I had a feeling this guy wouldn't make it through my commute home. It was the "explosive tanks" on his back, whatever they were; the cops couldn't let him detonate them. Terrible situation, for all involved.